NEW DELHI: The real estate boom of 2006 is set to gain further momentum in 2007 to get India foreign capital of over Rs. 8,000 crore with leading international investors establishing their presence, providing employment opportunities for over two lakh skilled and unskilled people.

According to an estimate by the Associated Chambers of Commerce and Industry of India (Assocham), overseas real estate giants such as Royal Indian Raj International, Blackstone Group, Goldman Sachs, Emmar Properties, Pegasus Realty, Citigroup Property Investors, Lee Kim Tah Holdings, Salim group, Morgan Stanley and GE Commercial Finance are likely to bring in all capital of $8 billion with the opening up of India's real estate sector to 100 per cent foreign direct investment (FDI).

The chamber has pointed out that the US-headquartered investment bank Morgan Stanley has already forayed into India's booming real estate sector in March 2006 through its real estate investment arm, Morgan Stanley Real Estate, investing Rs. 300 crore (around $68 million) in Mantri Developers Pvt Ltd. of Bangalore. Morgan Stanley plans to invest more than $1 billion over the next four-five years in the Indian real estate sector.

It also points out that Tishman Speyer of the U.S. tied up with ICICI Bank to invest $1 billion, while Kotak India Real Estate Fund closed its domestic tranche raising $100 million.

The chamber feels that an efficient regulatory framework and simpler tax regime for the sector are imperative to boost public-private participation and bring in managerial and technical expertise.

According to the findings, the biggest U.S. pension fund, CalPERS, hedge fund Farallon Capital Management, US-based developer Tishman Speyer and NRI fund Trikona Capital too have drawn up plans to invest in the booming market. Domestic funds including Kotak Realty Fund, HDFC India Real Estate Fund, Pantaloon Retail's Kshitij Real Estate Fund and UTI Venture Fund are also active.With the rules relating to investment and repatriation relaxed to a large extent, an estimated 25 million non-resident Indians (NRIs) living in 125 countries, are investing in immovable property in India.

Strong economic growth, rising income levels, growing middle class, increasing urbanisation and improving transparency brought resurgence for the Indian real estate sector in 2006 which will continue to grow further in 2007 with easy availability of financing facilities.

The chamber forecasts that investment in real estate will go up from $12 billion in 2005 to $90 billion by 2015. Greater integration with the global economy and the increase in domestic as well as foreign investments are encouraging demand for real estate. Despite ill-founded doubts of a bubble, foreign investors are lining up, it observed.

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